- Hong Kong, slow adopter of IoT, struggles to keep pace with regional counterparts.
- Rising distrust with data security has cascading effect on adoption of cloud services.
- Blockchain technology can help elevate IoT security levels.
Microsoft's Wincy Chan
The Asia-Pacific region is expected to dominate the global internet of things market, which is slated to reach US$724.2 billion by 2023, boosted by the availability of low cost data services and a propelled demand for connected devices, according to recent data from Research Nester.
However, Hong Kong still trails behind its regional counterparts largely due to inadequate government support and unabated data security concerns from the public over the last five years, Wincy Chan, Microsoft Corp.'s Asia IoT Ecosystem Lead, told S&P Global Market Intelligence.
S&P Global Market Intelligence: Is Hong Kong's much-talked about lamppost initiative, namely the government-led strategy to install 400 smart lampposts in four urban areas, enough to give the city a boost in the IoT race?
Wincy Chan: This initiative is a good start but it is not enough to bring Hong Kong forward and to the front of the IoT space. If you compare the city to sister financial hub Singapore, the differences are stark. A prime example is the way Hong Kong has not made data for transportation, such as train timings, public while in Singapore, this information is accessible to the city’s commuters. Another example is Hong Kong’s healthcare sector, where IoT applications have vast potential in terms of patient video monitoring to free up hospital beds and provide patients with family care. Singapore has started this initiative but Hong Kong is still not there yet.
What challenges is Hong Kong facing in the IoT space?
Hong Kong's economy relies heavily on its financial sector, which is typically the slowest sector to adopt emerging technologies such as IoT and artificial intelligence. Therefore, Hong Kong has become a slow adopter of IoT. Over the last 10 years, the government has also not been proactive in fostering new innovation and technology. There is a need to provide more clarity on data sovereignty and privacy to users, for example. This leads to another reason why Hong Kong’s IoT sector is not keeping pace with its rivals: data security concerns. Rising distrust with data security has had a cascading effect on the adoption of cloud services. If cloud adoption is not as high, IoT devices will need to rely on networks. However, as the number of smartphones multiply, 5G networks may not even be able to handle data processing.
What can the authorities do to address data security concerns?
Firstly, the regulator should provide clearer guidelines for the use of public, private and hybrid cloud models. This will guide companies on which data should be kept on the cloud and which can be kept in devices. And secondly, there should be more discussion, and eventually adoption, of blockchain technology among key industry bodies. I believe Blockchain technology can help elevate IoT security levels immensely.
Will Hong Kong feel threatened by the growing presence of China's tech giants as they are eyeing the IoT market as well?
In the cloud space, Alibaba Group Holding Ltd. and Tencent Holdings Ltd. are making big moves so expect competition on that front. However, in the connected devices space, Xiaomi Corp. upcoming Hong Kong IPO will provide Hong Kong with a much needed push rather than be a threat.
Looking forward, where will Hong Kong’s IoT market be in the next five years?
With the new Hong Kong government's council of advisers on innovation and strategic development, over the next five years Hong Kong will close the gap [with] others in Asia. Indeed, the IoT ecosystem is already improving in the last year alone. One possible driver may be Hong Kong’s pollution which will push the government to use IoT to monitor its carbon footprint.